Arizona Real Estate License Practice Exam

Functional obsolescence refers to a reduction in the desirability or usefulness of a property due to outdated features or a design that does not meet contemporary standards or needs. In the case of a five-bedroom house with only one bathroom, this configuration does not align with the typical expectations of modern homebuyers, who tend to prefer more than one bathroom for convenience and functionality. This misalignment in demand versus supply creates a functional deficiency that affects the property's overall marketability and value.

Other situations listed may involve issues, but they do not specifically illustrate a design or functional inadequacy like the lack of sufficient bathrooms in a house meant for a larger family. Worn out carpet can be replaced and is often considered a cosmetic issue, rather than a fundamental design flaw. Lack of parking might deter some buyers but doesn't directly imply that the property is functionally obsolete in terms of its basic utility. A location next to a factory may be an aesthetic concern but does not indicate a deficiency in the property's functional design. Thus, a five-bedroom house needing additional bathrooms exemplifies functional obsolescence because it highlights a critical mismatch in the property's design versus modern buyer needs.